G20 London 2009

This year’s G20 summit in London on 2 April has an agenda that focuses on the stability of financial markets, sustainable growth and jobs. The Group of Twenty was created in 1990 to bring together industrialised countries to discuss issues important to the global economy.

"Everyone is suffering from the reckless behaviour of a handful of people who have turned the world economy into a gigantic casino", thunders Brazil’s President Luis Inacio da Silva. Turning from what triggered the current crisis to its causes, he says, “we are rejecting blind faith in the markets". So are a growing number of economists worldwide.

The commission is headed by Nobel economics prize winner Joseph Stiglitz, who teaches at Columbia university in New York. Stiglitz himself is a sharp critic of the IMF/World Bank attitudes to the world economy and of the “Washington consensus”, meaning the dominance of the US government inside those bodies. The UN commission comprises of 19 senior economists from all the continents.

What hope, then, for reform? Pressure from organised civil society successfully forced some 66bn euros of poor-country debt cancellation over the past decade. Coalitions such as the UK's 138-organisation Put People First are pressuring the IMF and World Bank to refrain from inflicting harmful conditions on poor countries and to cancel more debt.

The International Monetary Fund and the World Bank are key instruments of what is known as the Washington consensus. The two bodies were set up back in 1944, when Europe was in ruins and much of the developing world was still colonised. Calling the shots inside the system, almost from the start, has been the US Treasury department.

As senior US economist Paul Krugman observes, the “market mystique” didn’t always rule financial policy. The US, he says, emerged from the Great Depression with a tightly regulated banking system, which made finance a sedate, even boring business. Banks attracted depositors then used that money to make loans.